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Shares of Microsoft (MSFT) are up $1.43, or 2.2%, at $65.70, after the company yesterday afternoon beatfiscal Q2 expectations and forecast this quarter’s results higher as well, helped in particular by a less-bad personal computer environment.

One question, as always, is how much revenue Microsoft’s “Azure” cloud computing service is generating.

Azure is what most people consider “real” cloud computing, the new stuff. Microsoft doesn’t break out revenue for the business. (I asked again yesterday.)

Bernstein’s Mark Mordler estimates it is probably “low 20s” as a percentage of Microsoft’s “commercial cloud” total. Microsoft said commercial cloud is generating an “annualized run rate” north of $14 billion. That would put Azure revenue at about $3 billion or so, he figures. A similar figure comes from Morgan Stanley’s Keith Weiss, who estimates sales were $1.6 billion in fiscal ’16.

One big surprise today is the grudging support of Citigroup’s Walter Pritchard, who raised his rating to Neutral from Sell, and raised his price to $65 from $41, writing that he doesn’t seen any downside to the shares, according to a write-up of the report from TheFlyontheWall.

Pritchard’s upgrade was lampooned on CNBC’s “Fast Money: Halftime Report” today as being two years late.

Shares of Microsoft (MSFT) are down 47 cents, or 0.7%, at $62.24, along with the broad market decline, despite an upbeat note this morning from CLSA’s Ed Maguire, who reiterates an Outperform rating, and also raises his price target to $72 from $65, citing both cloud computing and corporate demand for Windows 10 as things that could pay off for the company.

Maguire writes that Microsoft is the “main beneficiary” along with Amazon’s (AMZN) AWS of the continued shift to cloud computing, “as the proportion of Global 2000 workloads in the public cloud increases from 5% to 20% in 2017-2018.”

We forecast 44% growth in recognized revenues in FY17 driven by Azure, Dynamics and Office365. We view Office365 as a greenfield opportunity with less than 7% of the 1.2bn global users having migrated yet to subscription.

It’s long been my contention in Barron’s magazine that virtual reality is not ready for prime time.

“A long time” means since the things went on sale at the start of this year. I ordered the “Rift” headset from Facebook‘s (FB) Oculus unit when it first went on sale in early January. I later obtained a headset from Taiwanese mobile technology giant HTC (2498TW) for review purposes.

I’ve been testing the Vive and Rift for about two months now, off and on. I’ve shown the systems to various people at Barron’s and to interested people outside the journalism and tech worlds — what you would call ordinary people.

The big picture is that this is really the beta version of the technology, perhaps even the alpha version, and it’s difficult to imagine anyone who’s an ordinary person shelling out for the technology before substantial improvements are made.

The year’s wackiest, most exhausting trade show comes to Las Vegas on January 3rd, and one way to view the Consumer Electronics Show is through the failures of past installments.

Having gone to Vegas for many years now, I remember well several things that had prominence at each show, touted as the next hot development. Many went on to be outright flops, or merely footnotes.

Not all are failures per se, but most things that were big in the moment didn’t turn out exactly as hoped by their creators and by investors.

A brief sample of the last decade:

2016’s show was definitely the year of virtual reality, as Facebook’s (FB) Oculus unit hosted long lines to try out its controller before it was commercially available. Orders went live for the “Rift” during the week of the show. HTC (2498TW) was also talking up its “Vive” headset. One analyst spoke of CES showing an “inflection point” for VR broadly speaking. There were even novel add-ons like the VR “treadmill” from Virtuix.

Welcome back from your holiday feast, for those in the United States. Shares of large-cap tech are mostly trading higher, with Amazon (AMZN) up $5.62, or 0.7%, at $785.74, in early trading; Alphabet (GOOGL) up $2.50, or 0.3%, at $781.50; Intel (INTC) up 9 cents at $35.29; and Facebook (FB) up 25 cents at $121.09. Notable laggards in early trading are down 6 cents at $111.17; and IBM (IBM) is down 19 cents at $161.79.

Black Friday selling mania is in full effect, and MarketWatch’s BarbaraKollmeyerreports that an early start to deals drove a 13.6% increase, year over year, in online electronics sales, as “U.S. shoppers hit their mobile devices and laptops to shop on Thanksgiving Day, racking up sales of over $1.15 billion.”

Speaking of deals, Apple has unveiled its Black Friday discounts, which aren’t really discounts but rather offers of gift cards to buy more stuff from Apple when you buy select products. Reflecting on this, Brian White with Drexel Hamilton reiterates a Buy rating on the stock, and a $185 price target, writing that the company “remains one of the best positioned tech companies to benefit from spending trends this holiday season with a well-received iPhone 7/7 Plus, a new Apple Watch and a new MacBook Pro with Touch Bar.”

Following Microsoft’s (MSFT) Windows and Surfaceevent in Manhattan earlier today, Cowen & Co.’s Gregg Moskowitz is one of the first Street observers to weigh in on what he saw at the show, concluding that none of the announcements were in and of themselves “material,” but that the company “was able to illustrate its strategy to better monetize Windows users over time.”

“This was a solid product event for MSFT, even as we don’t view any of the announcements as being game-changing,” writes Moskowitz, who has an Outperform rating on Microsoft shares, and a $64 price target.

The new offerings “largely underscore the co.’s strategy to better monetize Win10 indirectly via gaming and Surface (in addition to search, which was barely discussed today).”

The biggest thing shown at the event was the new “Surface Studio” combo desktop PC and tablet, he writes, which is “stunning,” and is moving toward creating alternatives to Apple (AAPL) hardware:

The most notable device announcement was Surface Studio, a $2,999 (now available for pre-order) PC featuring a large (28″), high resolution (>60% more pixels than 4k) and highly maneuverable “weightless” folding screen, that is ideal for designers, artists, etc. to use with the Surface Pen. The form factor of Surface Studio is stunning and includes an almost impossibly thin LCD. And complementing the Surface Pen, an innovative new input device called Surface Dial enables users to access a wider range of Windows functionality, and can be used to physically interact with a Surface device screen, or off-screen if preferred. For example, Surface Dial can be placed directly on the screen to pivot an image, change a color palette, or use as a scroll wheel. Finally, a new Surface Book i7 with a 16 hour battery life and 2x graphics was announced for high-end use cases (gaming, CAD, etc), available in November for $2,399. No new Surface tablet was announced [...] As with last year’s Surface Book, the Surface Studio looks compelling and will no doubt appeal to creative professionals. We are impressed with Surface Studio and find the price point very reasonable for the value received. While clearly not a mainstream product, we take this as further evidence of MSFT’s efforts to innovate, and promote a more aspirational brand, as well as offering a more compelling alternative to some of Apple’s higher-end offerings.

Microsoft (MSFT) this morning held an event in downtown Manhattan that included both an update to Windows, the “Creators” edition, and also new versions of the company’s Surface tablet computer, including a revamp of the “Surface Book” laptop and tablet combo device, and a new desktop machine called the “Surface Studio” that has the thinnest display ever made, the company claims.

Perhaps the most intriguing thing at the event was something called “Dial,” a rotating puck device that can function like a wireless mouse with the Studio, but can also be placed right on top of the display itself to bring up a context-specific menu of functions, or to perform actions like cut and paste.

The company’s head of devices, Panos Panay, took the stage to revisit the theme of the “versatility” as embodied in the “Surface Book” combo laptop and tablet, introduced at this time last year. Panay said gamers were demanding greater frame rates for the device, and CAD/CAM designers wanted features more particular to what they do. “And everyone wants more battery life.”

The new “Surface Book i7,” said Panay, doubles the performance of the prior model and includes a redesigned thermal system with “hyperbolic” fans, and more batteries, for sixteen hours of battery life.

As widely expected, Microsoft (MSFT) a short while ago sent out invitations to a media event in New York this Wednesday morning, October 26th, hashtag microsoftevent, with tag line “Imagine What You’ll Do” displayed backwards on a window.

I’ll be on hand that morning to follow things as they kick off.

The Verge’s Tom Warrentells us this will be another event focusing on the Surface tablet computer, like the year-ago October event, with the expectation there’ll be an “all-in-one” Surface computer that’s more of a desktop reinvention than a mobile device. Overall, though, Warren writes there’ll be “less hardware” and “more of a theme around 3D and creativity,” citing no one in particular.

Microsoft (MSFT) kicked off its “Ignite” user conference in Atlanta today, and a couple observers from the Street took a look at what the company had to discuss, concluding Microsoft is being more ambitious, more aggressive with cloud computing, with a greater and greater focus on unseating Salesforce.com (CRM).

In conjunction with the conference, Microsoft announced a new set of “metrics” it will disclose on a quarterly basis. Among the 20 separate metrics that will be disclosed are three new ones: how much gross profit Microsoft makes from its “commercial cloud” computing services; how much it makes from its gaming products; and the rate of growth in its “Windows Commercial” and its “cloud services” business, combined. More on the details in a prepared deck of slides on Microsoft’s Web site.

Deutsche Bank‘s Karl Keirstead, who has a Buy on Microsoft shares, and a $65 price target, was there all day today, and notes that “key incremental news included the ADBE partnership, new Azure services (Azure Stack, Azure Monitor, new WAF functionality) and the GA of Windows Server 2016 (including the new container-friendly Nano Server).”

He was referring to yesterday’s announcement that Adobe (ADBE) plans to move more and more of its “Creative Cloud” and other apps to Microsoft’s “Azure” cloud computing platform. About that announcement, Keirstead writes,

Research firm IDC this morning announces that while Adroid software from Alphabet’s (GOOGL) Google unit dominates tablet sales, the market is changing and the software is threatened by both Apple’s (AAPL) iOS and by Microsoft’s (MSFT) Windows.

Apple had the number one share of tablets, at 25.8% with 10 million shipments of its iPad, besting Samsung Electronics (005930KS), Lenovo Group (0992HK), privately held Huawei, and Amazon.com (AMZN). Collectively, Android had 65% share of the tablet market, the firm estimates, in Q2, besting Apple’s share, and the small sliver held by Windows.

However, analyst Jitesh Ubrani sees Android threatened by the fact it has not done well in the category of “detachables,” which by IDC’s count includes the iPad “Pro” model, and Microsoft’s “Surface” line of tablets.

Ubrani sees Google bringing new capabilities to Android to try and close the gap:

The market has spoken as consumers and enterprises seek more productive form factors and operating systems – it’s the reason we’re seeing continued growth in detachables. At present, it’s difficult for Android to compete with iOS or Windows detachable products. However, the next 12 to 18 months will be very interesting as Google launches the next version of Android with better multi-tasking support and as they begin to bring together their two operating systems.

Total tablet shipments in the quarter fell by 12%, year over year, to 38.7 million units.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.